In the most populous U.S. state, California, $1 million in retirement savings would last you about 14 years. But if you settle down in Mississippi, the same amount of money would last you nearly 10 years longer.
It's typically much less expensive to live there than it is in the Golden State. Take groceries, for example. The average annual cost for food in Mississippi is $3,760, according to data from GOBankingRates. In California, however, you'd pay $4,782.
To figure out the number of years, months, and days $1 million would last in every state, researchers from the personal finance website gathered key financial data from the Bureau of Labor Statistics. They multiplied each state's overall cost-of-living index with its estimated annual expenses. Yearly expenditures were then multiplied by other costs including housing and health care.
The states were ranked from the shortest to longest time that money would stretch. Here are the top four U.S. states where $1 million in retirement savings would last the longest.
Amount of time $1 million would last: 23 years, 2 months, 2 days
Annual groceries cost: $3,760
Annual housing cost: $6,297
Annual utilities cost: $3,406
Annual transportation cost: $4,124
Annual health-care cost: $6,094
Total annual expenditures: $43,129
Amount of time $1 million would last: 22 years, 8 months, 17 days
Annual groceries cost: $3,772
Annual housing cost: $6,577
Annual utilities cost: $3,630
Annual transportation cost: $4,147
Annual health-care cost: $6,319
Total annual expenditures: $43,993
Amount of time $1 million would last: 22 years, 6 months, 22 days
Annual groceries cost: $3,656
Annual housing cost: $6,914
Annual utilities cost: $3,509
Annual transportation cost: $3,848
Annual health-care cost: $5,822
Total annual expenditures: $44,299
Amount of time $1 million would last: 22 years, 3 months, 10 days
Annual groceries cost: $4,045
Annual housing cost: $7,289
Annual utilities cost: $3,364
Annual transportation cost: $4,299
Annual health-care cost: $6,747
Total annual expenditures: $44,858
On average, nationwide, $1 million would last about 19 years, the data finds. Living in these states would offer some cushion, but experts say it's important to keep quality of life in mind, too.
"Make the time to understand where you are financially and how much you will really need," says Dorothy E. Bossung, a certified financial planner and executive vice president of Lowery Asset Consulting. "Look at the items already mentioned and think about where you want to be. Are you close to family? Or in an area that gives you 'summer' all year around? Or do you love snow skiing and hiking? Colorado, Montana, or Wyoming sound better."
Find out if you can work remotely, she adds. You may need to find a new job.
"If you are seriously considering relocation as an option, do your homework and research, but visit the state and the towns you are considering." And not just once, she adds: "There should be a series of visits" to get a sense of the area.
Try to "behave as you would if you lived there. I have a client who loves to go to Barnes & Noble on the weekends. If the place doesn't have a Barnes & Noble, or a similar store, the client would be very unhappy."
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And don't move just to save on taxes, says Erika Safran, a certified financial planner and principal at Safran Wealth Advisors. "The tax savings will not drive you to happiness. Being where you want to with a successful career will fund your future retirement years."
And while in Mississippi retirees can last the longest on $1 million, and pay fewer taxes than many other states, the study found that residents of the Magnolia State where among the unhappiest in the country, too.
So, wherever you land, be sure that's where you want to stay.
Having about $1 million put away for the future is a great goal. Many experts recommend reaching that amount to live out your golden years comfortably. Of course, that's easier said than done.
Nearly 60% of Americans say the economic impact of the crisis hurt their retirement plans, according to Allianz Life. Almost half reduced the amount they put away or stopped saving altogether. And 14% have taken money from retirement accounts amid the outbreak.
Video by Stephen Parkhurst
It is still possible to retire comfortably, whether it's with $1 million or much less.
Make it a goal to save at least 10% to 20% of your monthly income in a 401(k), Roth IRA, or a traditional IRA. These vehicles can offer compound interest to help your money grow.
"If you can't make the maximum contribution right away, at least contribute enough to get the maximum matching contribution if your employer provides one," says Bossung.
If you are cash-strapped because of the pandemic and these ideas seem overwhelming, focus on key expenses, including housing and food. If you come into extra cash or are lucky enough to get a raise like 165,000 Walmart employees are this month, she adds, take "all or a large portion and saving it in a retirement account. You are taking money you aren't used to spending anyway and putting it aside for your future."
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